PM sceptical dearer booze will cut consumption

Prime Minister John Key. Photo / Mark Mitchell

Prime Minister John Key says he is not convinced a minimum price for alcohol would work because it could force people to drink poorer quality liquor instead of drinking less.

The Ministry of Justice is researching the efficacy of a minimum price for beer, wine and spirits overseas, and is due to report its findings in September.

Mr Key said there were various models for a minimum price policy, but an attempt to introduce one scheme in Scandinavia had failed.

He said it was uncertain what a minimum pricing scheme would entail: "Does it mean a supermarket couldn't loss-lead ... or does it mean that there's actually a minimum price for a unit of alcohol?"

Mr Key believed that if a minimum price were set, it would change the quality of alcohol that people drank, but not the amount.

"What typically happens is people move down the quality curve and still get access to alcohol."

Alcohol watchdogs said minimum pricing was effective at raising the price of drinks that were high in alcohol relative to cost - such as cask wine. But retailers would be able to absorb the cost of a minimum price, so it would be ineffective unless accompanied by excise taxes.

Mr Key said he did not think an excise tax would stop people "pre-loading", binge-drinking before entering bars and pubs.

This went against advice from the Law Commission, which recommended a 50 per cent tax hike to push up the price of alcohol by an average 10 per cent.

A Herald-DigiPoll survey found 56.5 per cent of New Zealanders opposed a minimum price for alcohol and 40.6 per cent supported it.

The Maori Party has called for the initiative to be introduced in alcohol reforms due to return to Parliament this month.

But the Government does not want to commit itself to a decision before the ministry finishes its research.